Town and city jobs: Your job is different in another location

This CPB Discussion Paper shows that a job contains a different task package in a large city than the same job in a small city. We set out a theoretical model of the division of labour across cities, which shows that both the division of labour and the skill demand increase with city size. Most datasets hinder an empirical analysis of such a model as they lack spatial variation in job content. Using individual German task data, we are able to empirically estimate our model and analyse spatial variations in task content of jobs. The estimations support the predictions of the model: jobs in large cities consist of other task packages than the same jobs in small cities. Workers in large cities focus more on their core tasks and perform fewer subtasks than workers in small cities. Jobs demand more cognitive skills when they are performed in large cities. This spatial variation in job contents likely bias regional wage equations.